US mobile growth starts to stagnate

In the third quarter, U.S. mobile operators added a net total of only 2.4 million subscribers, the lowest growth quarter since the cellular industry took off in the 1990s, according to a new mobile data market report from Chetan Sharma Consulting. The high mobile penetration levels that have left many western European and east Asian wireless markets in states of stagnation are now making their way to the U.S.

While 2.4 million new customers does constitute growth, Sharma pointed out that 2 million of those new accounts were prepaid, which typically bring in a third to half the revenues of a contract customer. What’s more, most of the growth in contract customers came from a single provider, Verizon Wireless, which accounted for 2.4 million new postpaid customers. AT&T added only 400,000 while Sprint and T-Mobile lost a 1 million each. So while carriers are still slowly growing, with the exception of Verizon they’re making a lot less money on each new customer.

Another side effect making its way from Europe and Asia to the U.S. is the slow down in messaging traffic and growth. According to Sharma, the third quarter was the first in which SMS volumes began to shrink, both in terms of overall messages sent and average number of messages per subscriber. Over-the-top IP communications services have been eating into SMS’s growth for years now, but it looks like 2012 could be the first year where both messaging volumes and revenues will shrink in the US.

Here are some of the other gems from Sharma’s quarterly market report:

Smartphones accounted for over 75 percent of new mobile phones sold in Q3, but Sharma points that while half of U.S. subscribers own a smartphone, they’re concentrated in just 30 percent of U.S. households. That means smartphones aren’t trickling evenly over the U.S. population, but rather flowing primarily into certain segments. Sharma notes that this means there is still huge potential for smartphone growth.

Carrier mobile data revenues grew 3 percent quarter over quarter and 17 percent year-over-year, reaching $19.9 billion in Q3. Mobile data now accounts for 43 percent of all revenues. It won’t be long before data becomes mobile operators’ primary revenue stream. It already accounts for the vast majority of their network traffic.

Verizon and AT&T have definitely figured out how to make how to cash in on that mobile data growth. They occupy two of the top 5 slots in mobile data profitability across the worldwide mobile ecosystem. The other three are mobile Internet pioneer NTT DoCoMo, the world’s largest carrier, China Mobile, and Apple.

The average number of connected devices per U.S. household was five. Not every one of them was a cellular device, but according to Sharma, 80 percent of all connected devices sport some kind of wireless radio, whether 3G/4G, Wi-Fi or Bluetooth. We’re becoming a society increasingly relying on spectrum airwaves for all of our communication and entertainment needs.